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Google Will Soon Power Mobile Payments

In the first discussion at today's Web 2.0 Summit, Google CEO Eric Schmidt took the stage with what he describes as "some unannounced mobile device" also known as the Nexus S. Of more significance, however, is that Schmidt shared that the device includes a Near Field Communication chip that Google believes will redefine how we think about location.

With the NFC chip and Android's Gingerbread operating system, mobile device users will be able to tap a physical map point — the now-iconic Google Places point — to pay with their mobile device in lieu of credit cards or cash.

Google, then, is essentially announcing a very strategic move into the highly competitive mobile payment space.

In fact, Schmidt disclosed that Google will partner with third-party payment processors and continue to look for monetization opportunities through advertising. From the sound of it, this will be a competitive effort against PayPal's Mobile Express Checkout.

The showcased technology, described as "Bump for everything," will be baked into the Gingerbread release slated to come out in a few weeks. Schmidt believes that NFC chips will go a long to advance mobile payments, as the industry believes the technology will help minimize fraud.

Schmidt's statements around the significance of mobile payments echo those of eBay CEO John Donahoe and Andreessen-Horowitz partner Marc Andreessen, both of whom previously shared their prediction that mobile phones will replace credit cards.

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